Economics for MBA students
Course Syllabus:
Instructor:
Phone:
Email:
Daniel J. D'Amico
561-870-5941
danieljdamico@gmail.com
Office Hours:
This semester I am teaching Mondays, Wednesdays and Fridays. My formal
office hours will be from 9am – 11am on those days. But in general I tend to
be in my office, or on campus, throughout the week with the exception of
lunchtime, economics club meetings (occasional Thursdays during the
window) or administrative meetings.
If you find me, and need to ask a question, feel free to grab me when you
can, but the best and most reliable means is to come to the office during
those morning hours and or schedule an explicit appointment via the email
above.
I hope that you come by to introduce yourself, ask questions about class,
discuss economics and current events, or just plain say hello. My door is
always open and I honestly enjoy the company and conversation.
Catalog Description:
Introduction into economic analysis; efficiency and equity; production and
exchange; costs, supply and demand; markets, organizations, and
government; competition, cooperation and coercion, international trade.
Course Goals and Objectives:
This course is a Frankenstein's monster - it is an artificial creation of incomplete portions of other courses
and the topics covered within. Together it is my hope that the material will present to the student a
thorough survey of economic concepts and theories that will serve useful and profitable in the minds eye
of an MBA graduate - a businessperson, an executive decision-maker, or an entrepreneur.
The subject of economics is unlike most of the other subject fields within a traditional MBA program.
Most MBA classes teach students skill sets that they will be able to deploy while operating within the
business world. Whereas economics is more focused upon understanding the cause and affect relationships
that contribute to and operate within the business world. A football game is a useful metaphor. Accounting
and finance essentially teach you plays and strategies that may prove effective to help you win the game;
whereas, economics teaches you the rules of the game and how things operate within it.
The course material for this course falls into two main categories: micro- and macro- economics.
Microeconomics is focused on the individual buyer or seller, or an individual market; whereas
macroeconomics treats the nation-state as the relevant unit of analysis and is concerned with understanding
the functional features of the economy writ large.
The first portion of the semester will be most similar to a traditional microeconomics course. During this
time we will focus explicitly on microeconomics and price theory; the conditions of supply and demand
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and their subsequent role on the formation of market prices. The second part of the semester we will focus
upon macroeconomic topics; specifically the relationship between institutional environments (legal regimes
and public policies), their effect on individual decision-making, and the patterns of macroeconomic
phenomena that result there-from (the general accumulation of wealth over time, the variance of wealth
around the world, and the systematic patterns of boom and bust cycles).
Class Assignments:
Online Participation and Blogging:
Each week students will be expected to write brief essays in response to a motivating question that draws
upon the lectures and readings. Students can either share their own personal response to the question or
engage the posts from other students.
There is no limit to the word length, or the number of posts a student puts up. We will use the blog,
function on blackboard for these purposes.
At the end of the semester each student will submit a grade for each of the other students in the class
based upon how useful that student perceived the other students' comments and writings to their own
understanding of the material and their own intellectual development throughout the semester. Each
student will receive an average of the grades she was awarded by the other students.
Your blogging grade will count for 1/5 of your total final grade.
Weekly Quizzes:
Each week students will complete a ten question multiple-choice quiz based upon the material covered in
readings and lecture videos. This will be administered via blackboard.
The cumulative quiz grades will count for 1/5 of your final grade.
Research Paper:
Each student will be expected to perform a research project over the course of the semester of her
choosing subject to the following constraints. Final papers must be at least ten pages in length, 12 point
font - Times New Roman, not including bibliography, cover page, charts, tables, headers or footers. Pages
should be numbered and your bibliography should conform to either MLA or Chicago style.
I am not a stickler for any particular citation style. My motto is “writers write, and editors edit.” But be sure
to leave a consistent trail of citations that demonstrate you did not plagiarize and that a subsequent
researcher could easily track down your sources if she was so curious. For style and grammar assistance, I
recomend that students visit the university's Writing Across the Curriculum laboratory.
For research assistance students should seriously consider making an appointment with a University
librarian once they have selected their research topic.
What should your research paper focus on? Business is fundamentally about providing value for
consumers. Each student should select some problem or challenge for individuals, groups, or society writ
large, and investigate how such problems might be serviced by a for profit enterprise. Good topics include
but are not limited to public services traditionally provided by central planning and government
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bureaucracy (roadways, education, health care, police, etc.) or perhaps more abstract notions of societal
problems such as equality, justice, racial tolerance, quality culture, etc.
The central debate of twentieth century political economy is captured by the aptly titled documentary
Commanding Heights - which everyone who resides in the entire cosmos should either, buy, borrow, rent,
steel, pirate, and watch immediately! In any case, the title Commanding Heights refers explicitly to two
oppositional perspectives on organizing decision-making processes in society - markets on the one hand
and governments on the other.
While there are a variety of moral, ideological, political and practical debates surrounding any and all such
institutions in society, I do not want you to necessarily delve into the normative issues surrounding the use
of markets or governments to provide you topical goods or services. Economics is a positive science economists are concerned about cause and effect relationships. How is it that changes in perceived costs
and benefits will result in changes in consumer and producer choice? I invite you to skip the moral and or
political discussions about if we should have certain services provided publically or privately. Instead I
want you to ask if one were to try to provide such services in a market how would she do so? Is it possible
at all, why or why not?
In short, the assignment is straightforward. How could a firm or business model be designed so as to make
profits providing value for individuals and society, where it is currently unconventional for formal business
models to be applied today? Why are current provisions the way that they are? What historical legislations
and argumentative justifications lead to the public financing and public administration models that we
currently use? Do these arguments hold true today in the same manner as they did in the past? What
transition policies would be required to change towards a market-based model? Are such policies politically
feasible, why or why not?
My reason for this assignment is as follows: when you train for athletics or study for standardized tests, you
tend to perform drills and exercises that are actually more difficult than the scenarios you would likely
encounter during actual game play. In this vein, I would consider the challenge of thinking through the
potential business models of non-conventional products and services more challenging than doing the
same exercise for an actual product or service that already exists. If current MBA students will be expected
to entrepreneurially recognize profit opportunities in the market, design innovative and creative business
models, and make strategically profitable business decisions previously unrecognized by competing
companies - then writing business plans for goods and services that are bought and sold traditionally on
the market is relatively easy compared to the more challenging task of writing business plans for less
conventional services where it is more often presumed that markets cannot function. If you can
conceptualize how to run a post office, or a highway system or the social security system as a profitable
business than surely running a restaurant or a store front should be a piece of cake.
Some helpful resources for this project include but are not limited to the following readings; they are
included online in the course materials for this class:
Coase, R. (1974). "The Lighthouse in Economics," Journal of Law and Economics. 17(2): 357-376.
Benson, B. (1994)."Are Public Goods Really Common Pools: Considerations of the Evolution of Policing
and Highways in England," Economic Inquiry: 249-271.
Beito, D. (2000). From Mutual Aid to the Welfare State: Fraternal Societies and Social Services, 1890-1967.
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University of North Carolina Press.
You are welcome to email me and or set up an appointment to discuss your potential research topic and
ask for guidance towards research source materials.
Writing is hard and requires revision. My commitment to you is that I am willing to pre-read any rough
draft that you compose throughout the semester. I will give annotated comments and explain what grade
you would likely receive on the paper if it were to be turned in as a final draft as is. I will further give you
specific advice and recommendations as to what would bring the paper closer towards an A grade. There is
no limit as to how often, how frequently or how early this process can be repeated.
In theory is you wanted to write a full research paper in the first week of class and turn it in, and I deemed
it worthy of an A, then you would be done with that assignment for the rest of the semester. Also, in
theory if you turned in a paper that first week but it was incredibly off base, you could essentially turn in
revisions everyday thereafter and get feedback until you assured yourself the grade you desire. Very few
students exploit this opportunity early in the semester and I tend to get an onslaught of rough drafts turned
in about a week before the paper is due at the end of the semester. I do not have a firm policy on when
research papers cannot be submitted for feedback. If it is close to the deadline and I have the time, I'm
happy to give feedback, but as the final deadline approaches there are no promises that I will be able to get
to your paper. In other words act sooner rather than later. Lastly, it is important to note that the more
effort you initially put into a paper the more focused and effective my feedback can be. If you turn in a
general outline and a loose idea, I can make some general comments. If you fully write out a ten page draft
I can tell you what types of evidence you should be looking at and which particular paragraphs you need to
include or cut.
I grade research assignments on the basis of what I judge to be their publication potential down the road,
as if I were an editor at an academic journal or the organizer of a panel at an academic conference. An A
signifies that I think you have sketched a line of thought with sufficient clarity and cogency that I would
invite you to submit the manuscript for presentation or publication. A B indicates that while you have not
convinced me that the manuscript warrants publication as it is, you have nonetheless convinced me that
you have a reasonable grasp of your subject matter. A C means that I don't come away with a clear idea of
what you are trying to accomplish, and might even think you are blundering around a bit. Ds and Fs are
possible graduate grades but typically mean that you have not met the requirements of the assignment.
Your research paper will count for 1/5 of your final grade.
Examinations:
There will be one midterm examination and one cumulative final examination.
The midterm and final will each be worth 1/5 of your final grade.
Grades on examinations and weekly quizzes will be awarded according to the following grading scale:
90 – 100
85 – 89
80 – 84
75 – 79
70 – 74
A
B+
B
C+
C
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65 – 69
60 – 64
0 – 59
D+
D
F
Academic Integrity Statement:
The following passage is reprinted as it appears in the University Bulletin 2008 – 2009:
All academic work will be done by the student to whom it is assigned without
unauthorized data or help of any kind. A student who supplies another with
such data or help is considered deserving of the same sanctions as the
recipient. Specifically, cheating, plagiarism, and misrepresentation are
prohibited. Plagiarism is defined by Alexander Lindley as “the false
assumption of authorship: the wrongful act of taking the product of another
person’s mind, and presenting it as one’s own” (Plagiarism and Originality).
“Plagiarism may take the form of repeating another’s sentences as your own,
adopting a particularly apt phrase as your own, paraphrasing someone else’s
argument as your own, or even presenting someone else’s line of thinking in
the development of a thesis as though it were your own.” (MLA Handbook,
1985).A student who is found to have cheated on any examination may be
given a failing grade in the course. In case of a second violation, the student
may be excluded for one or two terms or dismissed from the university.
A student who engages in cheating, plagiarism, or misrepresentation on term
papers, seminar papers, quizzes, laboratory reports, and such may receive a
sanction of a failing grade in the course. A second offense may be cause for
exclusion or dismissal from the university. Faculty members are required to
report immediately to the dean of the student’s college any case of cheating,
plagiarism, or misrepresentation which he or she has encountered and, later,
the manner in which it was resolved.
The dean of the student’s college should apprise the student of the serious
consequences of cheating, plagiarism, and misrepresentation as well as of the
appeals procedure open to the student in such cases.
Disability Statement:
A student with a disability that qualifies for accommodations should contact Sarah Mead Smith, Director
of Disability Services at 865-2990 (Academic Resources Center, Room 405, Monroe Hall). A student
wishing to receive test accommodations (e.g. extended test time) should provide the instructor with an
official Accommodation Form from Disability Services in advance of the scheduled test date.
This arrangement is the student's full responsibility. The Academic Resource Center will always be given
copies of exam materials and be ready to administer a test for those entitled. Students should not request
such accommodations after an examination has begun or been completed.
Course Schedule and Reading List:
Week 1: Course Introduction
(1) Course Syllabus
(2) Read, L. (1958). I, Pencil: My Family Tree as Told to Leonard E. Read. Irvington-on-Hudson: Foundation
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for Economic Education.
(3) Hayek, F. (1945). “The Use of Knowledge in Society,” American Economic Review. 35(4): 519-30.
(4) Klein, D. (2006). "Rinkonomics: A Window on Spontaneous Order," Library of Economics and
Liberty: Featured Article May 1.
(5) Munger, M. (2005). "Everybody Loves Mikey," Library of Economics and Liberty: Featured Article
August 1.
Week 2: Rationality and Incentives, Supply and Demand
(1) Stigler, G. and Becker, G, (1977). "De Gustibus Non Est Disputandum," The American Economic Review.
67(2): pp. 76-90.
(2) Mises, L. (1949). Human Action: A Treatise on Economics. San Francisco: Fox and Wilkes. Chapter 1:
Acting Man: pp. 11-29.
(3) Rothbard, M. (1962 [2009]). Man, Economy and State with Power and Markets: Scholars Edition. Auburn: The
Ludwig von Mises Institute. Chapters 5-9: pp. 319-628.
(4) Bastiat, F. (2007). The Bastiat Collection. Auburn: The Ludwig von Mises Institute. That Which Is Seen,
and That Which Is Not Seen: pp. 1-48.
Week 3: Substitutes, Complements, Elasticity
(1) Mankiw, G. (2011). Principles of Microeconomics. Sixth Edition. New York: Cengage. Part II. How Markets
Work? pp. 63-132.
(2) Alchian, A. and Allen, W. (1964). University Economics. Belmont: Wadsworth. The Fundamental Laws of
Demand: pp. 64-79.
(3) Bertonazzi, E., Maloney, M. and McCormick, R. (1993). "Some Evidence on the Alchian and Allen
Theorem: The Third Law of Demand," Economic Inquiry. 31(3): 383-93.
Week 4: Price Controls, Taxes and Externalities
(1) Mises, L. (1940). Interventionism: An Economic Analysis. Irvington-on Hudson: Foundation for Economic
Education. pp. 17-34 and 51-60.
(2) Norton, R. (1985). “Unintended Consequences,” Concise Encyclopedia of Economics. Indianapolis:
Liberty Fund.
(3) Hazlitt, H. (1952). Economics in One Lesson. Irvington-on-Hudson: Foundation for Economics
Education. Minimum Wage Laws: pp. 118-123.
(4) Coase, R. (1960). “The Problem of Social Cost,” Journal of Law and Economics. 3(1): 1-44.
Week 5: Property Rights, Spontaneous Order and Entrepreneurship
(1) Alchian, A. and Demsetz, H. (1973). “The Property Rights Paradigm,” Journal of Economic History. 33(1):
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16-27.
(2) Demsetz, H. (1967). “Toward a Theory of Property Rights,” The American Economic Review. 57(2): 34759.
(3) Hardin, G. (1968). “The Tragedy of the Commons,” Science. 162: 1243-48.
(4) Kirzner, I. (2000). Driving Force of the Market. New York: Routledge. pp. 203-72.
Week 6: The Theory of the Firm
(1) Coase, R. (1937). “The Nature of the Firm,” Economica. 4(16): 386-405.
(2) Sautet, F. (2000). The Entrepreneurial Theory of the Firm. New York: Routledge. pp: 1-54.
Week 7: Midterm
Week 8: SECTION II: MACROECONOMICS
Ancient and Mercantilist Thought
(1) McCloskey, D. (1972) "The Enclosure of Open Fields: Preface to a Study of Its Impact on the
Efficiency of English Agriculture in the Eighteenth Century," Journal of Economic History 32 (1): 15-35.
(2) Yaeger, T. (1999). Institutions, Transition Economies, and Economic Development. Oxford: Westview Press.
Chapter 2 Section 1: Dependency Theory. pp: 13-17.
(3) Rothbard, History of Thought, Chapter 7: pp. 213-34.
Week 9: The Classical School
(1) Smith, A. (1776). An Inquiry into the Nature and Causes of the Wealth of Nation. Indianapolis: Liberty Fund.
Book I: Of the Causes of Improvement. pp. 13- 267.
(2) Snowdon and Vane, Chapter 2.1 -2.5: pp. 36-50.
Week 10: Keynesianism and Monetarism
(1) Snowdon and Vane, Chapter 2.6-2.17: pp. 54-90.
(2) Snowden and Vane, Chapter 3: The Orthodox Keynesian School. pp. 101-47.
(3) Snowden and Vane, Interview with Milton Friedman: pp. 198-218.
(4) Friedman, M. and Shwartz, A. (1963). A Monetary History of the United States 1867-1960. New York:
Princeton University Press.
Week 11: Real Business Cycle Theory, New Keynesianism and New Classical Economics
(1) Snowdon and Vane, Chapter 5: The New Classical School. pp. 219-71.
(2) Snowdon and Vane, Chapter 7: The new Keynesian School. pp. 357-432.
(3) Stiglitz, J. (1999). "Towards a General Theory of Wage and Price Rigidities and Economic
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Fluctuations," American Economic Review. 89(2): 75-80.
(4) Akerlof, G. (1970). "The Market for 'Lemons': Quality Uncertainty and the Market Mechanism," The
Quarterly Journal of Economics. 84(3): 488-500.
(5) Snowdon and Vane, Chapter 6: The real business cycle school. pp. 313-43.
(6) David, P. (1985). "Clio and the Economics of QWERTY," American Economic Review. 332-7.
Week 12: Austrian Business Cycle Theory
(1) Ebeling, R. (ed.) (1996). The Austrian Theory of the Trade Cycle and other Essays. Auburn: The Ludwig von
Mises Institute.
(2) Garrison, R. (2001). Time and Money: The Macroeconomics of Capital Structure. New York: Routledge.
Week 13: The Wealth and Poverty of Nations
(1) Yeager, Chapter 4: Institutions and Economic Growth: The Static Case. pp. 35-45.
(2) Yeager, Chapter 5: Institutions and Economic Growth: The Dynamic Case. pp. 47-53.
(3) Easterly, W. (2001). "Material from Sections I, II and III," in The Elusive Quest for Growth. Cambridge:
MIT Press. pp. 1-24.
Week 14: Comparative Institutional Analysis
(1) Cowen, T. (2010). The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got
Sick, and Will (Eventually) Feel Better. New York: Penguin.
Week 15: Privatization and Political Economy
(1) Buchanan, J. (1983). “Monetary Research, Monetary Rules, and Monetary Regimes,” Cato Journal. 3(1):
143-146.
(2) Buchanan, J. and Wagner, R. (2000). Democracy in Deficit: The Political Legacy of Lord Keynes. Indianapolis:
Liberty Fund.
Final Examination:
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